PERT

What does PERT stand for?

Program Evaluation and Review Technique

 How and why did it come about?
• For some projects time is critical but cost
is not
– Specifically for R&D projects in defence,
space related research etc
• Many of these projects are very unique in
nature
– There is no prior basis for estimating activity
duration
• Many of these projects are also extremely
complex
– Conventional PM tools do not fit the bill
Events leading up to the
development of PERT

• Russia launches the

Sputnik Space Missile
in 1957, before the
Americans

• The Americans are

embarrassed
 Events leading up to the
development of PERT
• The Americans
retaliate by planning
to launch the Polaris
Ballistic Missile

• They cannot be
embarrassed further
by delaying the
launch
 Events leading up to the
development of PERT
• Expected durations of activities were
largely unknown
• Project Planning and Control was initially
lacking on the Polaris project
• Actual costs and project durations in the
initial stages exceed estimates by as much
as 50%
 Events leading up to the
development of PERT
• United States Department of Defense hires Booz
Allen Hamilton, to develop a Project
Management Technique for this project
• Booz Allen Hamilton invents the PERT technique
in 1958.
 What is PERT?
• Technique to assist in project planning
when historical cost and time data are not
available or reliable

• Usually associated with R&D and new

product development projects where the
uncertainty is great
 What is PERT?
• PERT statistically treats uncertainty
– Estimates the likely duration time
– Estimates the likelihood of meeting certain
milestones
• Rarely used in construction
– Can be used on projects where quantity
and productivity uncertainties exist
 Comparing PERT and CPM

PERT CPM
• Assumes variability in • Assumes fixed (or
productivity rates and very mildly varying)
therefore variability in activity durations
activity times
• Milestone or event • Duration or activity
focused focused
• Probabilistic • Deterministic
calculations Calculations
 How PERT works
• Since activity times are uncertain, PERT uses
three time estimates for an activity
– An optimistic duration (assumes high productivity) - To
– A pessimistic duration (low productivity) - Tp
• Not based on disasters etc
• Based more on late material delivery, equipment
breakdowns, bad weather etc
– A “most likely” duration - Tm
• Not the average of the Optimistic and Pessimistic durations
• It is the amount of time the activity will require most of the
time, if repeated many times
 Probability Basics

• Concrete Placement Data for Columns in a

Building

0 1 1 4 6 9 12 16 10 4 1 0 0 0
Frequency
36 38 40 42 44 46 48 50 52 54 56 58 60 62
Minutes to
Place
Histogram
Continuous Distribution
Normal Distributions
 Normal Distribution
• Also called the “bell curve”
• Approximates many distributions we see in real
life and on construction sites
• It can be defined by a mean (μ) and a standard
deviation (σ)
• The normal probability density function is
characterized by a unit area, with a mean of 0
and a variance of 1

• F(x; μ, σ2) =

–∞<x<∞; σ2 is called the “variance”

 Unpacking the normal distribution
• Mean μ – average of all the values in the
distribution
– For a probability density function μ is the
mean, median and mode
• Standard Deviation σ – a measure of the
dispersion of the data

σ=
 Standard Deviation

• Approximately 68% of values lie within 1 σ from

the mean
• Approximately 95% of values lie within 2 σ from
the mean
• Approximately 99.7% of values lie within 3 σ
from the mean
Means and Standard Deviations

• μ1 = μ2 = μ3

• μ 4 < μ1
1

4 • σ1 < σ2 < σ3

2 • σ 4 > σ1; < σ2,

3 although μ1 = μ2
 The Central Limit Theorem
• Completion times for each activity could follow a
variety of distributions
• The sum of these distributions (i.e the overall
project time) will tend to follow a normal
distribution
• So we assume that
1. The mean of the sum is the sum of the means
2. The variance of the sum is the sum of the variances
3. The distribution of the sum is a normal distribution
regardless of the shape of individual distributions
 Cumulative Distribution Function

• Gives the probability that a random variable X is

less than a given value x
 Using the cumulative distribution
function
1. Convert the distribution into a standard normal
distribution (μ=0 and σ =1)
2. For a random variable X with a mean of μ and a
standard deviation of σ, the standardized
random variable is

3. Use the normal distribution table to find out the

probability of an event
Calculating the probability of an
event
• A project is normally distributed and has a mean
duration of 4 days and a standard deviation of 2.

1. What is the probability that the project will be

completed in 7 days?

2. In 3 days?
 Completing within 7 days

• μ=4, σ =2, X(variable)=7

• Z = (7-4)/2 = 1.5
• F(1.5) = 0.933
• P(completing within 7 days) = 93.3%
 Completing within 3 days
• μ=4, σ =2
• X(variable)=3
• Z = (3-4)/2 = - 0.5
• F(-z) = 1-F(z)
• F(-0.5) = 1-F(0.5)
• F(0.5) = 1-0.691 = 0.309
• P(completing within 3 days) = 30.9%
 Activity Properties in PERT
• Activities follow a Beta distribution
– Characterized by modal and extreme values
 Activity properties contd..
• Empirically it is accepted that
• Expected duration of an activity is
– Te = (To + 4Tm + Tp)/6
• Standard deviation for the activity is
– σ = (Tp - To)/6
• Variance is
– υ = σ2
 The PERT algorithm
1. For each activity, calculate the expected
duration, standard deviation and variance
2. Use the expected duration as the basis for
performing a forward and backward pass to
obtain critical path
3. Sum the variances to find the variance of the
entire project
4. Use the cumulative normal distribution table to
determine probability of event or project
completion
 Use in construction
• Can be used instead of CPM when
productivity is unknown or variable

• Time data is often collected based on

experience

• Can be used to predict the likelihood of

various events and milestones being met
 An example

D F
A

C
Start Finish

B E G
 Data table
Activity To Tm Tp
A 2 4 6
B 3 5 9
C 4 5 7
D 4 6 10
E 4 5 7
F 3 4 8
G 3 5 8

Find expected project duration.

What is the likelihood that the project will finish within 20 days?
 Step 1 - Calculate expected
duration and variances
Activity To Tm Tp Te σ υ
A 2 4 6 4 0.66 0.44
B 3 5 9 5.33 1 1
C 4 5 7 5.17 0.5 0.25
D 4 6 10 6.33 1 1
E 4 5 7 5.17 0.5 0.25
F 3 4 8 4.5 0.83 0.69
G 3 5 8 5.17 0.83 0.69
 Step 2 - Calculate Critical Path
0 0 0 0 0 0

A4 D 6.33 F 4.5
0 0 0 0 0 0

0 0 0 0 0 0

Start C 5.17 Finish

0 0 0 0 0 0

0 0 0 0 0 0

B 5.33 E 5.17 G 5.17

0 0 0 0 0 0
 Critical Path Calculations
0 4 4 10.3 10.3 14.8

A4 D 6.33 F 4.5
0 0 8.66 4.66 15 15 4.66 19.5
0

0 0 4 9.17 19.5 19.5

Start C 5.17 Finish

0 0 4 0 9.17 19.5 0 19.5

0 5.33 9.17 14.3 14.3 19.5

B 5.33 E 5.17 G 5.17

3.83 3.83 9.17 9.17 0 14.3 14.3 0 19.5
 Step 3 - Cumulative Progress
Activity To Tm Tp Te (ES) σ υ
A 2 4 6 4 0.66 0.44
B 3 5 9 5.33 1 1
C 4 5 7 9.17 0.5 0.69
D 4 6 10 10.33 1 1.44
E 4 5 7 14.34 0.5 0.94
F 3 4 8 14.83 0.83 2.13
G 3 5 8 19.51 0.83 1.63
 Probability of finishing in 20
days
• μ=19.51, σ2 = 1.63 (critical path variance)

• X(variable)=20

• Z = (20-19.51)/1.28 = 0.38

• F(0.38) = 0.648

• P(completing within 20 days) = 64.8%

Thank You